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User Numbers Of Mobile TV Rising – But There's More

A recent study by M:Metrics in the UK surveyed 22,000 users of Mobile TV, and found some disappointing results: the number of ex-users (~60%) is greater than the number of current users (40%). That’s a lethal stat for a new technology, given that the early adopters have tried the service, and abandoned it, and are now telling their friends to avoid it. It doesn’t leave much hope that the service is at a tipping point towards success. 45% of those surveyed said pricing contributed to quitting, while 24% cited poor quality. This is consistent with what we have been warning about Mobile TV for some time. My thoughts on mobile video:

1) Users will not pay as much as carriers hope they will, killing many business models. Despite surveys that ask about willingness to pay, answering a survey and actually paying are very different things. Other surveys that show high satisfaction with Mobile TV offered the service for free during the trial. These Pollyanna surveys have bogus results. The most telling survey is the one M:Metrics just did: 60% of real users voted with their (real) wallets to quit.

2) Advertising subsidies will help, but not fully fix the problem that the asking price is over the consumer willingness to pay. Advertising needs to be done tastefully.

3) Early failures will tarnish the service across the board, and will delay the acceptance of better services later on.

4) Too many hands in your pocket. Lots of companies want a share of the Mobile TV revenue. That’s not unusual for the media industry, where archaic, convoluted rev share contracts are the norm. But in this case, it’s a room full of 800-pound gorillas who all think they should get 50% of the take. That’s not a recipe for success.

5) There is a paradox between the need to offer a unicast solution that enables personal content control, and a broadcast solution for cost containment. But unicast uses up capacity on expensive 3G networks, and broadcast requires deployment of expensive overlay networks. By itself, neither network model really works. Hybrid models are best, but price is still an issue.

6) On-phone storage will solve many of the problems in the point above. Content can be stored on the phone, PVR-style. But then people may as well just get their content over a free sync with their PC, and use the consumer-proven iTunes model (which gives the carriers very little revenue). Why would people choose to use an expensive mobile network to transfer content to a phone when the can use DSL and a free Bluetooth, SD, or USB connection? If carriers drive people to this model by overcharging for video, they will have themselves to thank.

7) Vendors win. Whether the market for Mobile TV is successful or not, it’s the Soupe du Jour for mobile carriers. Carriers are investing billions with solution providers, equipment makers, subsidizing handsets, buying content. Eventually, the carriers will realize the negative ROI on these investments, adjust expectations, reduce prices, and Mobile video will survive because the investment is already sunk cost.

As for me, I’ve tried Mobile TV in a few of the incarnations, and have been wowed by the technology and disappointed by the overall service every time. Now I watch content on my Treo “sideloaded” from my PC for free using an SD card, and I’ll only adopt carrier services if the prices drop substantially. I may be a geek to do this, but Apple has taught the masses to expect this sideload business model, and I don’t see how the mobile carriers are going to un-teach it.

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